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Currency Market Analysis

Nov 12, 2018 | Currency Market Analysis

Global Themes

USD jumps from one-month lows as Fed holds course

The USDSGD returned to one-week highs on Friday after a stronger reading from US producer prices boosted the US dollar.

The greenback had weakened over the past fortnight as rising hopes about a trade agreement between the US and China and last week’s US midterm elections both weighed on the US dollar.

However, Friday’s trading saw the US dollar stage a comeback with a much stronger than expected producer price index reading – up 2.9% in annual terms – pushing the US dollar index back toward 16-month highs.

Brexit crunch-time

The USDSGD gained 0.2% with the pair now up 0.9% from last week’s lows.

The British pound fell after the resignation of another Cabinet minister ahead of a critical week for Brexit negotiations.

The euro paused on Friday after falling to major support at the five-month lows.

The AUDSGD fell from two-month highs.

Jobs and growth

The US dollar remains in focus with consumer inflation on Wednesday night and retail on Thursday night to be the major releases.

China’s industrial production and retail sales numbers will be seen as critical as markets continue to fret about a potential slowdown in Chinese growth.

In Australia, a big week of data sees business confidence on Tuesday, consumer sentiment and wage numbers on Wednesday and the all-important employment release on Thursday.

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